Walmart and Best Buy Opt Out of Apple Pay – Required Point-of-Sale Upgrades

http://forums.macrumors.com/showthread.php?t=1776896

by hyp0 • 12 years ago

47 53 12 years ago

forums.macrumors.com

I have two thoughts on Apple Pay:

1) Android has had cardless payment for 2+ years now via Google Wallet. That being said, Japan has had similar technology for way longer. While the marketing machine that is Apple made sure to let everyone know how magical/revolutionary/awesome/brilliant this form of payment it, Apple is late to the game. Similarly, other products such as Softcard/ISIS exist too from non-smartphone companies. Thanks Apple for finally catching up.

2) Apply Pay will, however, finally give cardless payment the push it needs. Apple has the market power to get retailers to start (read: more than rarely) embrace this technology (for example: Passbook & tickets). That I can fully support Apple for as the iPhone is the single best selling phone and will get NFC into the hands of millions very, very quickly. And with the volume of devices + Apple's marketing of Apple Pay = great news for payment.

hyp0• 12 years ago

The latter part of the story notes that retailers are being forced to upgrade anyway by VISA etc (anti-fraud measure). Apple is riding a bigger push.

And because they aren't trying to be a payments company, VISA etc aren't threatened and therefore will cooperate or even favour Apple. Apple is just a POS machine manufacturer.

stephenr5• 12 years ago

As I understand it apple pay works with the standard NFC payment tech that visa paywave/etc use, so apple isn't providing pos machines at all?

Regarding the "Google did it first" part - the devil is in the details. ApplePay will provide secure card less transactions while maintaining customer privacy - apple won't know (and don't care based on comments from eddie cue was it) what you are buying or from who.

With google wallet the worlds biggest information gathering ad delivery company gets a complete record of what you buy, when, from who, for how much, how often etc.

I know a lot of the tech industry treats google like some kind of benevolent uncle who can do no wrong and has nothing but good intentions, but for some people privacy still carries value.

Given that google wallet only works in the USA 3 years after it's launch, I don't really think its anywhere near to a competing service in the grand scheme of things.

bitserf• 12 years ago

Google's implementation is carrier vetoable, since it's on the SIM.

Additionally, Google's implementation requires the transaction transit their infrastructure, Apple's does not. They don't even know the transaction occurred.

Yes, they're not technically first, but the two systems are not identical.

Personally, the less a large corporation knows about me, the better.

djhworld2• 12 years ago

I'm not sure on the details on Apple Pay, but the Google Wallet app is a US only product.

DCKing• 12 years ago

I don't think your first thought is relevant for all of this.

It has been quite clear for quite some time that mobile payments was not a technology problem but a policy problem. The technology was not just ready for it with the release of the Nexus S - it was ready for it for years before that! The problem was getting people to actually use it. Since most vendors were trying to use mobile payments for their own short-term gain, things were going nowhere.

Apple has not "caught up" in that sense at all since they weren't behind in any meaningful way. There was no important reason for smartphones to have NFC as there did not exist many use cases for it without payments. Although I had high expectations of NFC when I bought my current Nexus phone two years ago, things simply never got off the ground in that area.

The contribution that Apple Pay makes to the market is quite unique if you look beyond technical merit. It provides an intuitive user interface for anyone's payment product for use in mobile phones. It isn't tied to your prepaid Google Wallet card, it isn't tied to your SIM card, and it isn't tied to propietary point of sale hardware. Furthermore, it is being pushed

I'd argue that Apple is the only one with the required leverage to push something like this into a market obsessed with conservatism and self interests. They have the power to convince shops and banks to cooperate with it, moreso than Google. Moreover, because they have their own hardware, it is easier for them to integrate a secure element and a user-friendly authorization method (the fingerprint scanner) to have an integrated solution.

It's not as if Apple has reinvented the wheel or anything, and I hope nobody is claiming that. But their execution of this idea seems very good. And it is the execution of the idea, your second point, that is the important part here. I hope that Google can fight off its own and carrier interests, and follow suit with a similar application. Many Android phones already possess all required hardware.

dhagz• 12 years ago

As mentioned in the article, Apple is taking advantage of required changes in POS systems to help make this push.

abritishguy2• 12 years ago

If the technology that Walmart is backing only requires a software update to existing phones then it is not nearly as secure as apple pay.

A lot of people are comparing Google wallet and apple pay like they are the same thing - they are not. A phone with compromised firmware could leak sensitive data with Google wallet but not with Apple pay.

drdaeman• 12 years ago

Depends on implementation.

NFC has that "secure element" thingy, that is, a TPM, like a SIM card. Implementations may vary. I'm unaware on actual Google Wallet NFC implementation, but I heard rumors (which are not certain by any means) at least Samsung had some hardware-assisted keystore. And I doubt Visa or MasterCard would permit Android vendors to do things on a phone's base OS a manner that could be exploited with a software hack.

abritishguy2• 12 years ago

The card details were stored on the secure element but the pin was not and because the authentication is not done using the secure element it is trivial to bypass: http://cybersecurity.mit.edu/2012/10/google-wallet-overview-...

The current implementation of Google wallet stores your card details in a google server which protects against these attacks but is not a viable business model (google are making a loss on every transaction since they pay it and then bill the customer themselves).

rgrieselhuber• 12 years ago

I'm guessing that Walmart customers are more likely to use Android vs. iOS.

tombrossman• 12 years ago

With Android's >80% market share and iOS' approaching single-digits, that's a pretty safe assumption. I hope to see more balanced numbers in the future (preferably including something less proprietary) but for now we have one very clear winner in this race.

MrScruff• 12 years ago

I would assume Walmart are focused on the US market share figures.

joesmo• 12 years ago

All customers are more likely to use Android vs iOS, even in the US as its marketshare is much greater. Unless you just mean to imply that people that shop at Walmart are poor, which whether true or not, is irrelevant.

pessimizer• 12 years ago

Why would it be irrelevant to Wal-Mart that Apple's marketshare is even lower amongst their customers than in the general population? I think it's crucial to note that price-conscious bargain shoppers and luxury fashion phone buyers may not overlap as much as the general numbers would indicate.

deong5• 12 years ago

The comments there are pretty much why people talk about a "distortion field" around Apple. It's basically person after person saying, "once all the iPhone 6 users start wanting to pay, they'll have to change their mind."

A few stats (from http://www.statisticbrain.com/wal-mart-company-statistics/): Wal-Mart, as a country, would be the 19th largest economy on earth. Of every $1 spent in the US, $0.06 goes to Wal-Mart. There are 100,000,000 shoppers in Wal-Mart every week.

NFC needs to become the way you expect to pay for things. Otherwise, it's Passbook -- that thing you vaguely remember that your phone can do, but that you don't really use, because in the time it takes to figure out if you can, you could just swipe your card.

If anyone's going to push it mainstream in one big push, it will be Apple pairing it with new iPhones. But it's not a given that that's the way it plays out, and every large retailer who pulls out is important.

colinbartlett• 12 years ago

Of every $1 spent in the US, $0.06 goes to Wal-Mart.

I do not believe you. How can that possibly be true?

deong5• 12 years ago

I don't know that it is -- I just pulled it from the cited link. The source cites it's own sources, and at a first glance, it seems reasonably well done, but there you go.

Oh, and on second thought, maybe it would have been better to say "through" Wal-Mart. They're not making 6% of the all the profit obviously.

svachalek• 12 years ago

It did sound low so I went to the link and it says 8 cents there.

chrisseaton• 12 years ago

In the UK it's often stated that £1 in every £7 spent in the UK is spent in Tesco - a large supermarket chain. http://www.telegraph.co.uk/news/politics/8471807/Its-time-Te.... This similarly sounds impossible. Maybe there's some extra constraints they don't mention - just supermarkets, or just consumer spending. I know I certainly don't spend anything like £1 out of every £7 in Tesco, or any other supermarket. For example I'm sure I've spent many times more on buying my house than I will in Tesco in my entire life.

This is the sort of thing that More or Less should look at http://www.bbc.co.uk/programmes/b006qshd.

spacemanmatt2• 12 years ago

Oh, the comment section.

ck2• 12 years ago

Also interesting to note Walmart receives an absolutely MASSIVE amount of income from food stamps and other federal/state assistance. Their sales surge on days people's benefits are filled.

18 percent of all (national) SNAP sales are conducted at its stores—about $13 billion annually

http://www.slate.com/articles/business/moneybox/2014/04/big_...

kalleboo• 12 years ago

So Apple Pay will need to support EBT cards...

Sambdala• 12 years ago

If this (from another comment) is true: "A quick google tells me Walmart has 11% of the us retail market and an estimated 18% of the grocery market, however again this is not a good indicator of their overall size of pos transactions, it does indicate that their numbers are likely better than 6%."

Then 18% of all SNAP sales seem incredibly reasonable given they make up 18% of the US grocery market.

Even without that stat, this has always struck me as a substanceless, emotional argument. If you have a program to give people money to go spend on groceries in grocery stores, then they're going to use that money to go spend money in grocery stores.

If you're super concerned there might be a margin on those products, then what's the alternative solution to whatever the stated goal of SNAP is?

I guess you could always scrap SNAP and create government farms and bakeries or something. That could never be less efficient or have any unforseen side effects...

rsvihla• 12 years ago

Of every $1 spent in the US, $0.06 goes to Wal-Mart.

Apple here is trying to get into processing payments for your groceries, food and clothes. I'm not sure you've thought through what the statistics are saying.

Every dollar in the US counts payments like mortgage, car, student loans, etc. These are not only high dollar items that make up a huge percentage of most people's monthly expenses, they don't add up to a large frequency. These high dollar low volume payments in effect totally negate the value of looking at Walmart's influence from a percentage of the total US dollars spent.

A quick google tells me Walmart has 11% of the us retail market and an estimated 18% of the grocery market, however again this is not a good indicator of their overall size of pos transactions, it does indicate that their numbers are likely better than 6%.

7952• 12 years ago

The real killer app for contact-less payments are not the big wall mart grocery shop. It is small payments that would usually need cash like a sandwich or magazine. These are also the kind of shops where loyalty schemes can be important. Think of the small coffee shop handing out "fifth cup of coffee free" cards. Think how easy it would be for apple to roll out loyalty schemes or promotions and absorb the cost into the transaction fee.

deong5• 12 years ago

That would make my point even stronger then. If Wal-Mart makes up far more than 6%, then it's even more important that they support any retail payment system you expect to take off.

jusben1369• 12 years ago

Apple Pay will have slow adoption simply due to it being tied to new phones and/or the US. That's tiny in global payments. Then I think its early traction comes via in app mobile payments. Things like Lyft and Uber. From there it'll branch out into physical retail. Short answer is the battle at retail is still 2-3 years away at least and that's OK

WorldWideWayne2• 12 years ago

I'm a techie and there's no way I'd consider using NFC until it's as simple as swiping my credit card. If it got that simple though - what would be the point? My credit card works fine.

Do I need another middle-man between me and my money expenditures? Nope. I already have trouble with Amex being overly secure and blocking my purchases at certain sites and locations.

therealidiot• 12 years ago

I'm not up-to-speed with Apple's new shiny things, is Apple Pay compatible with existing contactless payment systems over here in the UK?

djhworld2• 12 years ago

No, the contactless payment systems we have here use RFID, whereas Apple Pay (and other mobile payment solutions) use NFC

Apple Pay probably won't arrive here until next year and even then I doubt many retailers will take up on the offer http://www.independent.co.uk/life-style/gadgets-and-tech/app...

davb• 12 years ago

Yes, it's compatible with standard contactless EMV terminals. However it won't be supported here until at least 2015.

gergles• 12 years ago

Yes, it is. djhworld is laughably wrong.

All the contactless systems Visa/MC/Amex are deploying in the world are variants of PayPass/PayWave which are all based on an international standard and will work no matter what. The article djhworld linked to is talking about how users in the UK won't be able to add cards to Apple Pay because Apple doesn't have any deals with UK banks. If you go visit the UK and have an already-enrolled Apple Pay account, it will work at contactless terminals.

ghaff2• 12 years ago

One general issue I would have with Apple Pay is that I use credit cards that give me specific rewards such as money back or airline status-related benefits. Of course, there's no reason that Apple Pay couldn't be tied into similar reward programs but until it is, anyone who currently uses a reward card is likely to keep pulling out the plastic rather than bump the phone.

pktgen• 12 years ago

According to http://www.apple.com/iphone-6/apple-pay/:

Apple Pay works with most of the major credit and debit cards from the top U.S. banks. Just add your participating cards to Passbook and you’ll continue to get all the rewards, benefits, and security of your cards.

ghaff2• 12 years ago

Ahh. Thanks. I realized it worked with the existing credit card processing networks but didn't know it worked with the actual already issued cards--but, thinking about it, it makes sense that it would have to. (Given that it's the actual card issuers that determine credit worthiness, etc.)

sandGorgon• 12 years ago

is the fundamental act of a card swipe broken ? On on hand, I can clearly see the value of Square... and on the other hand, I can also see the value of business models like LevelUp (that commoditize mobile payments and leverage marketing budgets).

But is a disruption of mobile wallets vs credit cards even possible ? Why would a 19-year old college student prefer it ... or why would a 30 year old professional switch to it over credit cards ?

Istof• 12 years ago

I recently switched from magnetic stripe card to chip card and it is far slower to do a transaction... and by the end of 2015 most cards in the US will be chips probably... so I guess this could be one reason.

invisible• 12 years ago

It's pretty weird that both Walmart and Best Buy will probably be required to advertise Apple Pay and yet won't support it at their registers that is going to burn a lot of customers. If they don't want to support the NFC payment movement they shouldn't sell the products that have NFC. They are just going to regret this decision at some point when NFC is the norm and they have to do yet another round of POS upgrades.

WorldWideWayne2• 12 years ago

The phones doe a lot more than NFC payments. Why shouldn't they take a customers money just because they're betting that NFC payments will never achieve widespread popularity.

Walmart and Best Buy Opt Out of Apple Pay – Required Point-of-Sale Upgrades

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